Takeaways from iPhone Refresh

Update3 years ago
Apple’s devoted customer base is getting its big new phones, while investors are getting their price increase. So far, both sides continue to be happy.
At its annual iPhone refresh event on 9/12, Apple demonstrated one of its best competitive advantages: pricing power. The world’s most valuable company managed to raise its prices without seeming to do it.
Apple has raised the average price of its 17 iPhone models by 26% to $875. The company now has five iPhone configurations priced above $1,000 compared with only one before.
That is no small feat. Apple is the world’s largest consumer electronics company... and it's highly sensitive about its image. Some have been worried that it's pushing prices too far.
Last year’s iPhone X was the first smartphone to launch in North America with a starting price of nearly $1,000. The company says it has been its best-selling phone of the past cycle. But analysts also estimate that it has represented a much lower proportion of total iPhone sales during that period than new devices in previous years.
Still, the iPhone X has helped the company boost its revenues even with unit sales remaining flat. The reason: pricing power. Apple has been able to raise prices despite flat unit sales, resulting in net sales growth.
Apple’s shares have jumped 30% so far this year as our thesis has continued to play out. We still believe the company can outperform a mature smartphone market with higher prices and growing services.
As of this writing, AAPL was a portfolio holding of Titan. This security may cease to be a portfolio holding at some point in the future.

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